An East London council that is bracing for a £175million budget black hole over the next three years is beginning to consult with residents on its £70million saving proposals in an attempt to stay financially afloat.
Newham Council is looking at plans to stop funding Christmas and Eid lights, scrapping free tea and coffee for staff and could move employees from its main Dockside office to other parts of the borough as part of its cost-cutting measures.
Council-owned property located outside of the borough could also be sold off while the number of children’s centres operating in the borough could be reduced.
The council has said that £100m of its predicted budget gap is down to soaring temporary accommodation costs, with Newham experiencing the highest number of households in temporary accommodation out of the entire country.
For this financial year (2024/25), the council has forecast an overspend of £47m, of which £31m is due to temporary accommodation costs as more and more residents are finding themselves homeless due to issues such as being priced out of the private rented sector.
As well as identifying £70m in potential savings, the Labour-run council has asked central government for Exceptional Financial Support (EFS).
The Local Democracy Reporting Service (LDRS) understands that some savings, including raising all fees and charges except for resident parking by 20per cent, will be implemented immediately.
By increasing building and facilities hire, registration and celebration charges and raising penalty charges for littering or graffiti, the council hopes to raise up to £5m in extra cash.
The majority of the savings will need to be consulted upon with residents ahead of the draft 2025/26 budget report which will go to cabinet by early January of next year.
During Tuesday’s cabinet meeting on 15 October, Newham mayor, Rokhsana Fiaz said the council will continue its “razor-like focus” in identifying further savings and that over the next three years the council will be making “some really tough” decisions.
Ms Fiaz said: “We are working really hard through an ambitious housing delivery programme which includes building our own homes but also acquiring homes with the money that we’ve got because it is presently cheaper.
“We make no apologies for what we are doing and we will continue engaging with our residents and with councillors to explain what we are intending to do – we have been transparent and honest and open and frank about the scale of the temporary accommodation crisis that we face.”
She added: “We are going to be entering into a period that is going to be challenging – we are looking forward to the Autumn Statement and we are engaged in conversations with national government with regards to the EFS.
“…we will make no apologies going to this new government to say we need help and we are not alone, many councils are doing so.”
Councillor Zulfiqar Ali, cabinet member for finance and resources, described Newham as an outer-London borough with “inner-London characteristics” and argued the funding it had received under the previous Conservative government was “completely disproportionate”.
Mr Ali said: “Had we not had the temporary accommodation crisis, we would have had no problem balancing our budget, it is the temporary accommodation which is costing us the biggest amount.
“It is not a new problem, [it is] something that has increased over the last few years but for some reason London seems to be facing the worst consequences – and in London we are the worst one.”
Conrad Hall, corporate director of resources, said the report made it “clear” that the council is in need of government support to deal with its “difficult” financial position, bought on by the housing crisis.
He went on to say the council couldn’t rule out the need to make further savings above its current proposals that top £70m.
Mr Hall said: “We can’t rule out the need for further savings over and above what is identified here and of course residents and councillors should expect effective management in order to maximise the amount of efficiency gains that can be made equally.
“As has been set out, there will be difficult policy choices for the council to make as well as part of that financial budget as well.”
Cabinet members approved the recommendations in the report and its proposed savings will be consulted upon over the next few months.
On October 23, the council will host an in-person public engagement event at Stratford Town Hall.
Some of the potential savings identified by Newham Council include:
- Selling off the Debden House conference centre in Essex: £300,000
- Scrapping free tea and coffee for council staff at Dockside offices: £20,000
- Stop the maintenance of three bowling greens in Newham’s parks: £54,000
- Stop funding lights and street decorations for celebrational events such as during Christmas and Eid: £200,000
- Reduce allocated for community grants programme which have previously funded Warm Havens: £80,000
- Pause production of the Newham Magazine for 2024/25: £40,000
